ASML Holding NV (NASDAQ:ASML, ETR:ASME) has been handed a big vote of confidence from Morgan Stanley, which has upgraded the Dutch chip-equipment maker to “overweight” and lifted its price target from €600 to €950, implying about 20% upside from current levels.
The bank argues that the worst of the earnings downgrades is over and that attention should now shift to 2027, when it expects earnings of nearly €33 a share, some 8% ahead of consensus.
The drivers? A recovery in memory demand, a broader base of logic customers beyond Taiwan Semiconductor, and margin benefits from product mix and cost control.
Order momentum is likely to build again before the end of 2025, with deliveries feeding into late 2026 and 2027. While it is hard to call the precise inflection, Morgan Stanley sees stronger order intake in the fourth quarter than in the third.
It highlights memory pricing as a key leading indicator for wafer fab equipment spending, noting that ASML’s valuation tends to move in step with DRAM prices.
The bank also sketches out the risks. If logic demand weakens to a single dominant buyer, or if Chinese demand for less advanced lithography tools falls away, growth could disappoint.
But Morgan Stanley sees the risk-reward balance as skewed to the upside, with a bull case of €1,400 a share if memory and logic demand prove stronger than expected.
In afternoon trading, the shares were up 3% at €818.10.